SBA-backed loans up 29% through June, spurring $95M in local financing

In what may constitute as yet another sign of economic improvement, the U.S. Small Business Administration confirmed it has approved nearly $65 million in loan guarantees during the first nine months of fiscal 2011, reflecting a 29 percent increase in year-over-year activity in Puerto Rico and the U.S. Virgin Islands.

The loan guarantee approvals have supported $95 million in financing granted to more than 460 small businesses, the majority in Puerto Rico, SBA District Director José Sifontes said in an exclusive interview with News is my Business.

“This is the second year we’ve seen year-over-year growth in loan approvals. Last year was the first time in four years that we had growth and, if things normalize in the U.S. and they pass the budget, we should be right behind them in terms of positive activity,” Sifontes said.

“We couldn’t be more pleased with the results we are seeing,” Sifontes said. “As of the end of the third quarter we have approved 10 percent more loans than we did during the entire previous year. We look forward to September 30 and closing fiscal year 2011 with a bang.”

Sifontes attributed the growth achieved so far to the support of a core group of local banks that have upheld their interest in financing the small business sector, as well as the work of the Economic Development Bank.

He also said gave credit to last year’s approval of the Small Business Jobs Act — which improved the loan limits for some of the agency’s key programs and expanded financing opportunities for new kinds of businesses, among other things.

“The expansion of our flagship 7(a) loan program has become one of the principal reasons why that type of loan has grown by 81 percent in dollar terms and by 61 percent in the number of loans generated, year-over-year,” Sifontes said.

Banco Popular de Puerto Rico leads the way in 7(a) loan approvals, with 229 loans for $19.3 million, followed by Banco Santander Puerto Rico with 69 loans for $4.9 million, and Banco Bilbao Vizcaya Argentaria with 52 loans for $6 million.

“Our achievements are a direct result of the Jobs Act of 2010 and enhancements to SBA loan programs, as well as the dedicated efforts of our staff,” Sifontes said. “We are committed to small business entrepreneurship and to creating the jobs that will continue to strengthen the economies of the islands we serve.”

Most of the loans the SBA has backed during the first nine months of the current fiscal year have gone to businesses in five towns: San Juan with 102 loans valued at $12.7 million; Bayamón, with 30 loans worth $7.6 million; Guaynabo, with 21 loans worth $4.1 million; Caguas, with 26 loans worth $3.8 million; and Carolina, with five loans worth $3.2 million, Sifontes said.

Scouting for opportunitiesThe SBA’s local office is getting ready to host another of its “matchmaking” events, through which it pairs small companies on the island with local and federal government agencies with the goal of drumming up business opportunities.

“That’s one of the things that we’ve been doing, which has been very beneficial to those operations that prepare themselves to do business with the federal government,” Sifontes said. “The problem that local companies usually have is learning how to go about and procuring business opportunities out there. This is our way of helping them.”

On Aug. 8, the SBA will host its second matchmaking event this year, this time at the Inter American University in San Germán. So far, between 40 and 50 agencies and close to 200 businesses have signed up to participate, Sifontes said.

“We also see a lot of future in working directly with the regional clusters that are grouped by geographic region — DISUR in Ponce, INTECO in Caguas and DITEC in Mayagüez — because they are organizations that already have a critical mass of municipalities as members, enabling us to do a lot of one-on-one work with the mayors,” said Sifontes, noting that the SBA is slated to meet with members of the INTENOR cluster in Arecibo later this month.